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Finding #1 Stocks: Screening, Backtesting and Time-Proven Strategies by Kevin Matras

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Chapter 10

Winning Growth and Income Strategies

Now it’s time for us to take a look at Growth and Income strategies. Like the Value style, some people wrongly think that this style is boring or that (aside from the dividend) there’s no money in it. Nonsense! As we’ve seen with the Value style strategies, they can be quite exciting. And it’s the same with dividend paying strategies—if you’re doing them right.

In this chapter we’ll highlight three dividend paying strategies. We’ll also go over how some of the items we’ve used in the other styles can help us find the best income producing stocks as well. There’s something in here for everybody. But the style is decidedly Growth and Income.

Growth and Income Winners

A Growth and Income investor is looking for just that—growth and income: income through the steady stream of dividend payments, but not at the exclusion of growth. Growth is a main component (hence the name). The combination of capital appreciation (stock moving higher) and the dividend payout make these great stocks to get into. And you don’t have to want or need the income to find these stocks attractive. In fact, when you see the returns many can provide along with the lesser volatility and risk, these look like great stock candidates for any investor.

Parameters

The screen begins with the following parameters:

  • Zacks Rank <= 3
  • Return on Equity >= Median for the S&P 500
  • P/E using F(1) Estimate <= Median for the S&P 500
  • Debt to Equity Ratio <= 1
  • Beta <= 1

Now for the ...

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